Regulation of Simplified Corporations

1. Simplified Corporations

The SC is a new corporate type with lower complexity and administration costs which also has greater flexibility to regulate internal corporate affairs. The SC stands out for the expeditiousness of the initial registration process, which can be obtained within 24 hours as from the business day following the filing of the relevant documentation, provided that the template approved by the IGJ is used.

The SC can be incorporated by digital means and its mandatory book and records should be identified and kept by the IGJ through electronic means. Because of this feature, the SC is regarded as a step towards the modernization and digitalization of the Argentine companies’ legal framework.

The GR 6/17 will, in practice, make this new corporate type available as from September 1, 2017.
 

2. Registry role of the Inspección General de Justicia

The GR 6/17 establishes that the IGJ will act exclusively as a registry as regards the SC, and that the SC is not subject to the IGJ’s scrutiny during operations, dissolution and liquidation, even if their capital exceeds that provided for by article 299 subsection 2 of Law No. 19,550.

It also provides that the regulations contained in GR 6/17 will be applicable to the SC and that, in those cases not expressly contemplated therein, the General Resolution 7/2015 of the IGJ will apply as long as it is in accordance with the provisions of Law No. 27,349.
 

3. Electronic filing of acts subject to registration

All acts related to the operations of the SC that require registration will be processed through the Electronic Document Management System (EDMS) approved by Decree No. 561/2016 and its amendments. In addition, all procedures must be initiated through the platform Procedures at a Distance (PAAD) implemented by Decree No. 1063/2016 and Resolution No. 12/2016 of the Secretariat of Regulatory Modernization of the Ministry of Modernization, access link: (https://tramitesadistancia.gob.ar/).

Considering that the procedures will be done electronically, the GR 6/17 provides the formalities that all instruments filed for registration need to meet in order to be considered as authentic documentation subject to registration by the IGJ.
 

4. Initial registration of the SC. Template of articles of incorporation and notices and expeditiousness of the registration

The GR 6/17 establishes the requisites that must be fulfilled to obtain the initial registration of the SC. Likewise, it provides a template of the articles of incorporation (Annex A.2) which may be used by those who participate in the incorporation of a SC. Additionally, it establishes a template of the notice to be published in the Official Gazette in connection with the SC’s incorporation (Annex A.3).

If the template of the articles of incorporation is used and provided the notice is published in accordance with the template, the initial registration process will not require the filing of a legal opinion and registration can be obtained:

1. Automatically, in the cases strictly established in article 32, subsection 1, of GR 6/17; and
2. Within a period of 24 hours, as from the business day following the filing of the relevant documentation, if the conditions established in article 32, subsection 1, of GR 6/17 are not met.

On the other hand, if the template of articles of incorporation is not used, a legal opinion issued by a notary public or lawyer, as appropriate, must be submitted. For these cases, GR 6/17 does not provide for a period to obtain registration.

In line with Law No. 27,349, the template of articles of incorporation provides, among other things, the possibility to hold virtual meetings of the management and government bodies.
 

5. Obtaining and using digital records

Law No. 27,349 establishes that the SC must keep certain mandatory books and records, which must be identified with the IGJ by electronic means. Digital records will be automatically approved by the IGJ at the time of registration of the SC.  The SC may also request for additional records. On the other hand, GR 6/17 provides for the way in which those digital records obtained must be kept.
 

6. Other aspects provided for in the regulation

In addition to the above, GR 6/17 establishes the remaining filings that the SC must make before the IGJ and rules on other aspects of the operations of the SC.
 

7. Conclusions

In conclusion, GR 6/17 will make this new vehicle available as from the date of its entry into force.

The regulation focuses mainly on the initial registration of the SC with the IGJ and on the subsequent filings that such companies must make before said registry. This is based on IGJ’s understanding that its role as regards the SC is to act exclusively as a registry.

Filings for the initial registration of SCs that use the template for articles of incorporation and notice will be registered automatically or within 24 hours as from the business day following their submission, as the case may be.